Core Viewpoint - The recent revision of the classification evaluation system for futures companies by the China Securities Regulatory Commission (CSRC) aims to enhance the comprehensive and precise assessment of futures firms, strengthen their role in serving the real economy, and encourage differentiated development within the industry [1][4]. Summary by Relevant Sections Revision Background - The classification evaluation system has been a foundational regulatory framework since its initial implementation in 2009, with multiple revisions occurring in 2011, 2019, and 2022. The recent changes were prompted by the evolving market conditions and the need to address shortcomings in the existing system [2]. - The name change from "classification regulation" to "classification evaluation" reflects a shift in regulatory philosophy towards a more scientific assessment and positive guidance approach [4]. Key Changes in the Evaluation System - Five main areas of improvement were identified: 1. **Penalty Mechanism**: The new rules clarify that penalties will primarily be based on effective regulatory measures, eliminating redundant penalties and promoting a comprehensive punitive effect [3]. 2. **Incentive System**: The evaluation of service capabilities for the real economy has been enhanced, with market competitiveness indicators restructured into three categories comprising nine specific metrics [3]. 3. **Indicator Deletion**: Certain indicators, such as "weighted average daily client equity" and "cost management capability," have been removed to better align with current industry developments [3]. 4. **Special Evaluation Adjustments**: Special evaluations have been consolidated into three main areas: service to national strategies, party building and cultural development, and information technology development [3]. 5. **Special Incentives**: Additional points will be awarded for firms that cooperate with regulatory bodies in risk management and maintain a continuous compliance status over three evaluation periods [3]. Market Competitiveness and Service to the Real Economy - The revised evaluation system emphasizes a more comprehensive assessment of futures companies' overall performance, profitability, and capital strength, with a focus on high-margin, high-tech businesses [5][6]. - New indicators, such as "average daily positions of industrial clients," have been introduced to better evaluate the support provided to both industrial and institutional clients, thereby enhancing the role of futures markets in risk management for these sectors [7]. Implications for the Industry - The revisions signal a clear direction for the industry towards high-quality development, with futures companies expected to play a more active role in supporting national strategies and enhancing risk management capabilities [8].

Core Viewpoint - The newly implemented "Futures Company Classification Evaluation Regulations" emphasizes both macro and micro perspectives, aiming to enhance industry quality and compliance while reducing burdens on futures companies [1][2]. Group 1: Key Changes in Regulations - The new regulations introduce a clear scoring basis, emphasizing legal compliance and changing the previous practice of deducting points without legal procedures [1][2]. - The regulations optimize the scoring system by including all business types of futures companies in the evaluation criteria, adding new performance indicators related to market competitiveness [1][2]. - The new rules encourage continuous compliance development by awarding additional points for companies maintaining high compliance and risk management scores over three evaluation periods [2]. Group 2: Industry Development Paths - The revised classification system balances the development paths of "scale" and "specialization," providing policy incentives for both large and specialized futures companies [2][3]. - Large futures companies with comprehensive licenses can gain significant advantages in scoring and innovation opportunities if they rank high across all business lines, while also facing increased management pressures [2][3]. - Smaller, specialized futures companies can achieve comparative advantages in classification results by maintaining high compliance and risk management, demonstrating that both "large and comprehensive" and "small and specialized" models can coexist and thrive in the industry [3].

Investment Rating - The report maintains a "Buy" rating for Hong Kong Exchanges and Clearing Limited (00388.HK) [1] Core Views - The report highlights that Hong Kong Exchanges achieved record high quarterly profits supported by trading volume, with a 33% year-on-year increase in revenue to HKD 14.076 billion and a 39% increase in net profit to HKD 8.519 billion for the first half of 2025 [1][2] - The trading fee income from the stock market saw a significant increase of 112% to HKD 2.556 billion, driven by a 122% year-on-year growth in average daily trading volume [2] - The report anticipates continued growth in net profit for 2025-2027, projecting HKD 17 billion, HKD 18 billion, and HKD 19.6 billion respectively, with corresponding EPS of HKD 13.48, HKD 14.22, and HKD 15.43 [3] Summary by Sections Performance Overview - In 1H25, the revenue breakdown by business lines showed significant growth rates: cash market at 62%, derivatives at 15%, commodities at 8%, data and connectivity at 5%, and company projects at 28% [1] - The trading and transaction system usage fees increased by 49%, while listing fees rose by 30% due to a recovery in the IPO market [2] Revenue and Profit Forecast - The report forecasts revenue growth rates of 26% for 2025, followed by 6% and 7% in subsequent years, with net profit growth rates of 31%, 6%, and 9% respectively [3][7] - The projected P/E ratios for the next three years are 33, 31, and 29 times [3]

Group 1 - Bullish successfully raised $1.1 billion through its IPO, selling 30 million shares at $37 each, exceeding the previously advertised price range of $32 to $33 [1] - The estimated market capitalization of Bullish at the IPO price is $5.4 billion [1] - The IPO was oversubscribed by more than 20 times the amount offered, with BlackRock and ARK Investment Management expressing interest in purchasing up to $200 million worth of shares at the IPO price [1] Group 2 - Bullish's largest investor is co-founder Brendan Blumer, who is expected to hold 30.1% of the shares post-IPO, while board member Kokuei Yuan will hold 26.7% [2] - The IPO is led by JPMorgan, Jefferies Financial Group, and Citigroup, with plans to list on the New York Stock Exchange under the ticker symbol BLSH [2] - Bullish offers cryptocurrency spot trading, margin trading, and derivatives trading services primarily targeting institutional investors [1]

Group 1 - Bullish aims to raise up to $629.3 million in its IPO, planning to issue 20.3 million shares at a price range of $28 to $31 per share, potentially valuing the company at $4.2 billion [1][2] - The company is a digital asset trading platform operator and owner of media platform CoinDesk, which it acquired for $72.6 million from Digital Currency Group in 2023 [2] - Bullish's digital asset sales for the three months ending March 31 amounted to $80.2 million, with a net loss of approximately $348.6 million, compared to $80.4 million in sales and a net profit of $104.8 million in the same period last year [2] Group 2 - The company provides liquidity services for stablecoin issuers and offers cryptocurrency spot trading, margin trading, and derivatives trading services primarily targeting institutional investors [1][2] - Bullish's previous merger plan with a special purpose acquisition company was canceled in 2022, which would have valued the company at approximately $9 billion [1] - The IPO is being led by JPMorgan, Jefferies, and Citigroup, with plans to list on the New York Stock Exchange under the ticker "BLSH" [2]